A recent survey by Aon’s Rewards Solution practice provides insight into how firms are adjusting their people strategies in response to the current environment. The Global COVID-19 HR Pulse Survey: Accelerating Workforce Agility and Resilience, shows that flexibility and agility in rewards will be essential for managing the workforce of the future.
The responses of HR leaders from over 2000 companies globally make it clear that the ability to change direction quickly is a key requirement, whether in policy, rewards strategies, or workforce structure and composition. The question, then, is how is this flexibility achieved?
Flexibility essential to surviving change
Of the firms surveyed, 31% had, or expected to, downsize via layoffs, with 23% downsizing via furloughs. Of the hundreds of companies surveyed who furloughed employees during the pandemic, 52% expect to have most of them (75-100%) back on board within six months. Scaling down and then scaling back up, all within less than a year, is a lot of change to administer. In addition, the survey found that 32% of companies had (16%), or were considering (16%), long term restructuring of their operations and workforces.
Dealing with change requires equal measures of planning and execution, and the right HR systems are critical for both. Planning involves making informed decisions, and good decisions require the ability to harness the right data and use it to predict outcomes. Predicting the impact of a course of action is easier when you have the right tools to model and simulate. In personnel decisions, there are considerations like fairness, impact on operations, and cost factors. Having a total rewards solution that holds all the relevant demographic and compensation information, and allows you to simulate the effects of different scenarios, is vital to making sound decisions that minimize risk, optimize business outcomes, and treat employees fairly.
Workforce rewards change due to COVID-19
Many companies have taken actions to reduce compensation costs during the pandemic slowdown. 24% were adjusting or considering adjusting short term incentives, 23% canceling or considering canceling merit increases and another 15% deferring them, with 13% potentially reducing base salaries. 25% implemented some form of special compensation for employees working in higher risk environments with respect to COVID-19. When you consider the work that goes into a normal compensation cycle, that’s a lot of extra work for HR to make sure these critical changes happen accurately and on schedule.
Rise in virtual work affects reward strategies
Only 7% of the companies anticipate returning to the pre-COVID work environment. 70% anticipate having flexibility around work structure to include full or part time virtual work. 73% were determining what roles could best be remote, and 45% were allowing self-selection by employees to determine their work structure. 71% were investing in tools and technology to support remote work and collaboration.
In previous blogs we looked at how firms can adapt their total rewards and adapt their compensation systems to remote work. Rewards programs can (and should) be affected by a shift to remote work. In the short term, many companies surveyed were enhancing allowances for remote work expenses. But longer term, different rewards and incentives may make sense for remote workers vs. those in an office.
Whatever the reason for a distributed work model—whether talent strategy or business disruption—making it work requires a digital rewards platform to ensure that compensation processes can run smoothly even when workers and administrators are remote. An automated compensation platform also provides the ability to analyze data to help you understand the needs of your workforce and to tailor rewards appropriately to best individual needs, including for remote workers, and to model proposed plans quickly and efficiently.
Digital transformation enables needed flexibility
Digital transformation of rewards management can yield huge benefits in employee engagement, talent utilization and cost savings. It can enable the kind of flexibility needed to deal with a changing business landscape. As the world continues to deal with a health crisis, changes that were already made and reversed may yet be reinstated. It would seem that nothing should be taken for granted at this point. Change is the norm in the business world in the best of times, but the pace and scope of change will likely be at a new level for the foreseeable future.
Now is the time for HR teams to get the systems in place that will help them perform like heroes no matter the circumstances, and a flexible rewards platform is a good place to start. To get started, watch this free webinar presented by beqom and Alight to learn about the Post-Pandemic Mantras for Agile Total Rewards.